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T&G exports to witness 10% negative growth in H2 - Experts

26
Jun '09
According to data from General Administration of Customs, from January to May this year, China's exports of clothing and accessories registered US $36.82 billion, down 8.1 percent year-on-year, while shipments of textile yarn and fabrics realized $22.03 billion, down 15.5 percent year-on-year.

The downturn in international markets has affected confidence of business investment and from January to April this year, the investment in the textile industry added up to 68.1 billion Yuan in fixed assets, up 1.6 percent year-on-year, but annual growth rate fell 16 percentage points.

In addition, domestic apparel consumption also slowed down, which increased difficulties for export enterprises to shift their export products to domestic market. The sentiments of global recessionary trends are affecting the Chinese consumers too, who have dug their hands deep in to their pockets.

Industrial experts point out that textile and garment exports will stay in the negative zone for some more time and is expected to chalk up a 10 percent negative growth in the second half, with the most optimistic expectation being that the fourth quarter of this year will begin to see signs of warm-up.

Before the world economy bottoms out, Chinese textile enterprises only do not only face a slowdown in orders, but also have to contend with price cuts, which they have to adhere to in order to keep their machines running and keep their workers, busy with work.

At the 105th Canton Fair which concluded in early May, price competition was fierce, transaction price of textiles and apparel generally dropped by 5 to 20 percent, which means that enterprises will face increased price cuts in the next few months.

Domestic cotton price rose from 11,000 Yuan per ton at the beginning of this year to the current 13,000 Yuan per ton, with the import cotton price also increasing from January to May. In the first 5 months of this year, Chinese textiles and apparel also witnessed a significant recall of goods in their shipments to the key markets of the European Union and US.

Experts point out that price cuts can only play an important role temporarily, but in the long run, enterprises should focus on brand building and technological innovation, since orders will tend to flow to only those companies which concentrate in high-quality of their manufactured products.

Fibre2fashion News Desk - China


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